Frontline (FRO) AI Stock Analysis

• Market Cap: $5.19B
• Dividend Yield: 4.17%
• Average Volume (3M): 3.09M
• Price to Earnings (P/E): 23.8
• Beta (1Y): 0.60
• Revenue Growth: -13.41%
• EPS Growth: -60.18%
• Country: US
• Employees: 85
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Midstream
• EPS (TTM): 0.18
• Shares Outstanding: 222,622,900
• 10 Day Avg. Volume: 4,395,996
• 30 Day Avg. Volume: 3,090,678
• PEG Ratio: -0.26
• Price to Book (P/B): 1.35
• Price to Sales (P/S): 1.54
• P/FCF Ratio: -17.66
• Enterprise Value/Market Cap: 1.57
• Enterprise Value/Revenue: 4.60
• Enterprise Value/Gross Profit: 17.33
• Enterprise Value/Ebitda: 10.05
• 1Y Price Target: $23.44
• Price Target Upside: 0.60% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 1.8
• Revenue Forecast (FY): $1.24B

• Rating: 70 Neutral
• Price Target: $26.00 ▲(11.59% Upside)

Frontline's overall stock score reflects a strong financial performance with robust cash flow and profitability, supported by positive earnings call sentiment. However, high leverage, declining margins, and mixed technical indicators present challenges. The stock's valuation is moderate, with an attractive dividend yield.

Positive Factors

Fleet Optimization

A modern fleet with an average age of 7 years enhances operational efficiency and reduces maintenance costs, supporting long-term profitability.

Strong Liquidity Position

Robust liquidity provides financial flexibility to navigate market fluctuations and invest in growth opportunities, ensuring long-term stability.

Positive Market Outlook

Favorable market conditions with increased oil exports and trade lane shifts can drive demand for Frontline's services, boosting revenue potential.

Negative Factors

Declining Revenue Growth

A decline in revenue growth indicates potential challenges in maintaining market share or pricing power, affecting long-term financial performance.

High Leverage

High leverage can limit financial flexibility and increase risk, especially if market conditions worsen, impacting long-term viability.

Increased Operating Expenses

Rising operating expenses can erode profit margins and reduce cash flow, challenging the company's ability to sustain profitability over time.

Frontline Business Overview & Revenue Model

Company Description

Frontline Ltd. (FRO) is a leading provider of maritime transportation services, primarily focused on the oil and gas industry. The company operates a fleet of crude oil tankers and product tankers, specializing in the transportation of crude oil and refined petroleum products across global shipping routes. With a strong emphasis on safety and efficiency, Frontline is committed to delivering high-quality services to its clients while adhering to environmental regulations.

How the Company Makes Money

Frontline generates revenue primarily through the chartering of its vessels. The company operates on a time charter and spot market basis, where it leases its tankers to oil companies and traders for a specified period or for single voyages, respectively. Revenue is influenced by shipping rates, which can fluctuate based on market demand, fleet utilization, and prevailing oil prices. Additionally, Frontline may engage in long-term contracts with major oil companies, providing a more stable income stream. The company also benefits from operational efficiencies and cost management strategies to maximize profitability. Strategic partnerships with leading oil corporations and participation in joint ventures can further enhance its market position and revenue potential.

Frontline Financial Statement Overview

Summary

Frontline demonstrates a solid financial position with strong cash flow generation and profitability. However, challenges include high leverage and declining margins. The company needs to focus on improving revenue growth and managing its debt levels to enhance financial stability.

Income Statement

Frontline's income statement shows a mixed performance. The TTM data indicates stable revenue with a gross profit margin of 32.8% and a net profit margin of 13.1%. However, these margins have decreased from the previous year, where the gross profit margin was 50.9% and the net profit margin was 24.2%. The revenue growth rate has stagnated in the TTM period, contrasting with the previous year's growth of 14.7%. Despite this, the company maintains a solid EBIT margin of 28.5% and an EBITDA margin of 42.6% in the TTM, though both have declined from the previous year. Overall, the company shows profitability but faces challenges in maintaining growth and margins.

Balance Sheet

Frontline's balance sheet reflects a high debt-to-equity ratio of 1.52 in the TTM, indicating significant leverage, which poses a risk. The return on equity has decreased to 10.1% from 21.2% in the previous year, suggesting reduced efficiency in generating profits from shareholders' equity. The equity ratio stands at 40.7%, showing a moderate level of equity financing. While the company has a strong asset base, the high leverage and declining ROE are areas of concern.

Cash Flow

The cash flow statement reveals a strong operating cash flow to net income ratio of 1.32 in the TTM, indicating efficient cash generation relative to net income. Free cash flow has improved significantly, with a growth rate of 37.6% in the TTM, recovering from negative figures in previous years. The free cash flow to net income ratio is nearly 1, showing that the company is effectively converting its earnings into cash. Overall, the cash flow position is robust, with positive trends in free cash flow growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.77B	2.05B	1.79B	1.43B	749.38M	1.22B
Gross Profit	468.72M	1.04B	761.43M	481.00M	30.61M	536.70M
EBITDA	808.47M	1.15B	1.06B	725.83M	217.24M	628.35M
Net Income	217.88M	495.58M	656.41M	475.54M	-11.15M	412.88M
Balance Sheet
Total Assets	5.71B	6.22B	5.88B	4.78B	4.12B	3.92B
Cash, Cash Equivalents and Short-Term Investments	191.65M	417.56M	315.75M	490.81M	115.51M	177.36M
Total Debt	3.24B	3.75B	3.46B	2.37B	2.37B	2.20B
Total Liabilities	3.39B	3.88B	3.61B	2.51B	2.46B	2.31B
Stockholders Equity	2.33B	2.34B	2.28B	2.27B	1.65B	1.61B
Cash Flow
Free Cash Flow	846.07M	-178.84M	-775.24M	52.93M	-399.47M	-120.26M
Operating Cash Flow	858.43M	736.41M	856.18M	370.89M	62.93M	604.06M
Investing Cash Flow	75.01M	-483.40M	-1.24B	-239.47M	-363.06M	-715.97M
Financing Cash Flow	-1.00B	-147.80M	433.07M	10.03M	223.55M	124.18M

Frontline Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 23.30
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FRO, the sentiment is Neutral. The current price of 23.3 is below the 20-day moving average (MA) of 24.34, below the 50-day MA of 23.72, and above the 200-day MA of 19.09, indicating a neutral trend. The MACD of -0.03 indicates Positive momentum. The RSI at 43.79 is Neutral, neither overbought nor oversold. The STOCH value of 9.79 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FRO.

Frontline Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INSW	76 Outperform	$2.55B	11.74	11.43%	6.24%	-23.59%	-57.70%
STNG	75 Outperform	$2.88B	9.05	9.63%	2.87%	-35.37%	-57.86%
DHT	72 Outperform	$2.06B	10.33	18.81%	5.76%	-16.45%	23.94%
FRO	70 Neutral	$5.19B	23.81	9.32%	4.17%	-13.41%	-60.18%
TNK	68 Neutral	$1.93B	6.19	17.02%	3.59%	-20.11%	-26.44%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
GLNG	56 Neutral	$3.91B	65.46	2.99%	2.71%	19.15%	329.74%

Frontline Corporate Events

Frontline Announces Synthetic Options Grant and Exercises

Frontline plc, a company operating in the shipping industry, announced on May 27, 2025, the grant of 362,284 synthetic options to its management and employees. These options, which will vest over a three-year period and expire in 2030, are part of the company’s synthetic option scheme. Additionally, on September 8, 2025, a director exercised 44,000 synthetic options, and on September 12, 2025, the CEO exercised 110,000 synthetic options. These transactions reflect the company’s ongoing efforts to align management incentives with shareholder interests.

Frontline PLC Reports Mid-2025 Financials and Strategic Fleet Sale

Frontline PLC reported its financial results for the six months ended June 30, 2025, highlighting its fleet composition and recent strategic moves. The company announced the sale of its oldest Suezmax tanker for $36.4 million, expected to generate significant net cash proceeds and a gain in the third quarter of 2025. Additionally, Frontline is involved in ongoing legal proceedings initiated by FourWorld Capital Management LLC, which challenges past transactions related to Euronav NV. The company intends to defend itself vigorously against these claims.